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Lindsay R

Homebuilders ETFs performance

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Hi Lindsay,

The homebuilder ETFs were doing pretty well, but with widespread lockdown worldwide, thanks to corona virus, the housing market is struggling. While the housing sector hasn’t been hit as hard as other industries such as airlines, it is feeling the impacts. The loss of employment in different industries means few people can afford to buy homes right now. Those who can afford are in fear, and buying a house right now is probably the last thing in their mind. The supply of building material and provision of labour are affected hence the homebuilders can’t build fast enough.
Even though the industry seems to be resilient, the less-capitalized homebuilders might not withstand the weaker housing activities if the lockdown and economic slowdown prolong. This might force them to close down.
 However, most homebuilders are continuing to build, hoping for the market to improve once lockdown eases. If it happens so, then homebuilder ETFs can gradually gain their lost glory.

 

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